KUALA LUMPUR (Sept 27): Tek Seng Holdings Bhd fell as much as 19 sen or 15% on unconfirmed reports that the solar cell manufacturer was retrenching some 200 employees.

Tek Seng shares fell to their lowest so far today at RM1.08. At 3:41pm, the stock pared losses at RM1.10 for a market value of RM384.25 million.

Shares of Tek Seng saw some 22 million units traded, making the stock Bursa Malaysia's seventh most-active entity. Tek Seng was also the fourth-largest decliner.

A news report, which quoted a memo, appearing to be from Tek Seng, indicated that the retrenchment was due to "redundancy of productivity".

It was reported that Tek Seng officials could not be reached for comment.

Following the report, Tek Seng has yet to make an official announcement on the matter to Bursa Malaysia or the media.

Analysts were quick to downgrade Tek Seng on the sentiment. UOB Kay Hian (M) Holdings Sdn Bhd cut its Tek Seng earnings forecast by 13% and 17% for financial years ending Dec 31, 2017 and 2018 respectively.

UOB Kay Hian analyst Yeoh Bit Kun wrote in a report today that the research firm also downgraded Tek Seng shares to "sell" with a lower RM1.05 target price.

"We have trimmed our 2017/2018 forecasts by 13%/17% as we have revised our (solar cell) ASP (average selling price) assumption to US$0.30/US$0.32 per watt (RM1.24/RM1.32) in 2017/2018, from US$0.34/US$0.35 per watt. However, the weak solar cell price could be partly offset by the strengthening ringgit. Our current forex assumption is RM4.00/USD.

"We gathered that the labour rationalisation programme involves 240 staff members and the retrenchment cost will be incurred by its Taiwanese client who takes up the lines," Yeoh said.